AUSTIN >> William J. White says that payday lenders don't depend on making loans to people who can't immediately pay them off, but a prestigious national foundation disputes his assertion.

White, who is vice president of payday lender Cash America and chairman of the industry-regulating Texas Finance Commission, in December claimed that his industry does not depend on charges it collects from borrowers who can't pay them off after the initial term for its profits. He implied that borrowers who couldn't immediately repay would not pay at all.

"Anybody who loans money or sells a product where they don't get paid for it, all they're doing is losing money," White said. "Why would you do that?"

White came under fire for other comments he made in an interview in which he said his company did not exploit people who were desperate for cash. Instead, he said, people who were trapped in payday loans were guilty of making bad financial decisions, such as buying $6,000 televisions.

State Sen. Wendy Davis, the Democratic candidate for governor, seized on the comments and said they show that White is unfit for the chairmanship of the finance commission, which oversees the state's consumer watchdog.

White also is wrong when he claims that his industry does not depend on customers who, instead or immediately paying off loans, rack up interest by repeatedly rolling them over, according to research by the Pew Charitable Trusts, a nonpartisan, nonprofit foundation that studies public policy issues.

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"Lenders sell payday loans as a temporary bridge to the next payday, though in reality most borrowers are indebted for much longer than one pay cycle," according to a 2012 report by Pew. "Payday loan consumers take out an average of eight payday loans a year, often renewing an existing loan or taking out a new loan within days of repaying the previous one."

The report cites a 2009 paper by the Federal Reserve Bank of Kansas City that also found that payday lenders depend on loan rollovers for much of their profit.

"The business model does indeed depend on that," said Alex Horowitz, research officer for Pew's Small Dollar Loan Project. "There is a real gap in how the loan is packaged and how the loan is experienced."

That gap, Horowitz said, seems to be one reason why borrowers don't shop for the cheapest loans over extended periods of time — the loans are packaged as two-week or one-month transactions.

The Pew report included a survey of payday borrowers. It found another way in which the reality of payday lending differs from the way that it's sold to customers.

"Payday loans are frequently described as short-term credit for unexpected expenses, and marketing materials sometimes inform borrowers that payday loans are not intended for long-term use," the report said. "The industry advertises this small-dollar form of credit as a product that offers borrowers 'access to a financial option intended to cover small, often unexpected, expenses,' but states that a payday loan 'is not meant to be a long-term solution.' "

Pew's survey of payday lenders found that 16 percent borrowed to cover unexpected expenses such as car repairs. Sixty-nine percent borrowed to cover regular expenses such as rent or utility bills.

And while White might claim that borrowers get into trouble by making bad decisions, the Pew survey found that 8 percent of customers borrowed to make special purchases such as Christmas gifts.

Horowitz said the survey illustrates another way in which payday lending is not a well-functioning market. Borrowers who are so desperate that they're taking out high-interest, short-term loans to cover regular bills are likely to take those loans on any terms.

"It's not a competitive market when your core clientele comes in in immediate need of cash," said Ann Baddour, an analyst with Texas Appleseed, a group that advocates on behalf of the poor. "They're not going to shop around."

The Kansas City Federal Reserve study found that such "inelastic demand" prompted lenders to raise interest on the loans to the maximum allowed by law.

Texas does not limit fees charged on payday loans and, when stated as annual interest, rates commonly exceed 500 percent. A chart by the National Conference of State Legislatures shows that Texas' overall regulation of payday lending is among the most lax in the country.

"Texas does stand out in that we have no limits whatsoever," Baddour said of the amounts that can be lent.

In an attempt to keep payday borrowers from getting stuck in a cycle of debt, El Paso, Dallas, Houston, Austin and San Antonio have enacted ordinances that limit loans to a percentage of income and they limit the number of times the loans can be rolled over.

The payday-lending industry has opposed such ordinances.

White's company, Cash America, closed 28 of its Texas stores in the fourth quarter last year and blamed the closures on the new city ordinances, the Fort Worth Star Telegram reported earlier this month.

Yolanda Walker, a spokeswoman for the company, declined to comment Friday when asked whether the closures show that her company depends on customers rolling over their loans.